‘Aspiring’ or ‘Inspiring’ what does the 2013 budget mean to you?Posted on: 22 March 2013 by Andrew Stallard
Tax allowance for over 65s is to be increased but has George Osborne short changed those in and approching retirement? Andrew Stallard looks at Budget 2013.
George Osborne presented his Budget on Wednesday 20 March 2013 and his opening statement set the scene for some of the new measures announced, stating 'this is a Budget for people who aspire to work hard and get on'.(1) What that means to people depends upon your personal circumstances and as with any budget announcement general understanding is useful but the advice of a specialist financial adviser will ensure that you are prepared and are managing your financial situation to the best effect taking into account all the finer detail of the budget changes.
So, is it inspiring to you? If we briefly look at some of the main Budget tax proposals; the personal allowance for 2013/14 for those aged under 65 will be increased from £8,105 to £9,440. This increase is part of the plan of the Coalition Government to ultimately raise the allowance to £10,000 which will be achieved from 2014/15. There is also a new scheme for tax free childcare. (1)
For businesses there is a further reduction in the main rate of corporation tax to 20% from 1st April 2015 and employee-shareholder contracts will be exempt from income tax and NIC for the first £2,000 of shares received. There is also an introduction of an allowance of £2,000 per year for all businesses and charities; this is to be offset against their employer Class 1 NIC liability from April 2014. Plus a capital gains tax re-investment relief for gains made in the tax year 2013/14 where the gain is invested in Seed Enterprise Investment Scheme shares.(1)
For people contributing to a pension the annual allowance is an annual limit for giving tax relief on pension contributions. Contributions can be paid in excess of the limit but may give rise to an income tax charge on the member of the pension scheme. For tax year 2014/15 onwards the annual allowance will be reduced from £50,000 to £40,000. (1)
For investors from April 2013 the overall ISA savings limit will be increased to £11,520. (1)
Major reforms have also been announced, including over £5.4 billion of financial help, to tackle long-term problems in the housing market and to support those who want to get on or move up the housing ladder, including the introduction of a new housing scheme, Help to Buy.(1)
From April 2013, the Government will extend First Buy to provide an equity loan worth up to 20% of the value of a new build home, repayable once the home is sold, and widen the eligibility criteria, including increasing the maximum home value to £600,000 and removing the income cap constraint.(1)
The Government will also create a mortgage guarantee for lenders who offer mortgages to people with a deposit of between 5% and 20% on homes with a value of up to £600,000, increasing the availability of mortgages on new or existing properties for those with small deposits.(1)
Commentating on the Chancellor's plans to enable more people to purchase their own home, Ronan Marrion, mortgage expert at Truro and Wadebridge based Worldwide Financial Planning, said: “The news will be welcomed by a lot of people, especially as the support is not just for first time buyers and not restricted to new builds.
“It will also help people who have been struggling to sell their home.
“Obviously we need to assess the initiative in more detail, but there is a concern that property prices will artificially rise as a result of the increase in demand.”
As with any budget there is much more detail and your Financial Adviser will ensure that these details are taken into consideration when considering your individual needs and plans.
(1) Lang Bennetts
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